Brazil Central Bank expands fraud data-sharing rules to unauthorized betting operators

The Central Bank of Brazil has expanded the fraud data-sharing obligations of supervised financial and payment institutions to include information linked to unauthorized betting operators, under BCB Resolution No. 569, approved by the Board of Directors on May 19.

The measure amends BCB Resolution No. 343 of October 4, 2023, which sets out the procedures for implementing the exchange of data and information on evidence of fraud under Joint Resolution No. 6 of May 23, 2023.

The updated rule entered into force on the date of its publication in the Official Gazette of the Union, while institutions have been given later deadlines to implement the operational changes required by the resolution.

The resolution was signed by Gilneu Francisco Astolfi Vivan, Director of Regulation. It was issued by the Central Bank’s Board of Directors under Article 9 of Law No. 4.595 of December 31, 1964, and is also based on Articles 9-A of Law No. 4.728 of July 14, 1965, 9, item II, of Law No. 12.865 of October 9, 2013, and Article 24-A of Law No. 14.790 of December 29, 2023. The document also considers Article 9 of Joint Resolution No. 6.

A new Article 1-A has been inserted into Resolution BCB No. 343, stating that “the data to be shared and information on evidence of fraud includes evidence of the actions of natural or legal persons as unauthorized betting operators, as referred to in Article 24-A, paragraph I, of Law No. 14.790, of December 29, 2023.”

The amendment widens the scope of the electronic fraud information-sharing system already applicable to banks, payment institutions, and other entities authorized by the Central Bank. Consortium administrators remain outside the obligation established under Joint Resolution No. 6.

Resolution BCB No. 569 also changes Article 2 of Resolution BCB No. 343 by adding two new categories of activity. Item V now covers the provision of virtual asset services, while Item VI covers the provision of financial and payment services to individuals or legal entities acting as unauthorized betting operators, as referred to in Article 24-A, item I, of Law No. 14.790.

The amendment further adjusts paragraph 1 of Article 2 so that the payment services provisions apply to the newly added categories. Financial institutions and payment institutions will have to showcase these changes in the electronic systems used to exchange fraud-related data.

For cases involving financial and payment services provided to unauthorized betting operators, the Central Bank added paragraph 4 to Article 3 of Resolution BCB No. 343. The text states that “in the case related to article 2, caput, item VI, the identification referred to in item I of the caput must refer to unauthorized betting operators.”

The resolution also establishes separate implementation deadlines through the creation of Article 13-A. Institutions involved in virtual asset services will therefore have until October 30, 2026, to adapt their systems to the new requirements. Entities providing financial and payment services to unauthorized betting operators will have until December 1, 2026, to implement the necessary measures.

The staggered deadlines provide time for institutions to develop mechanisms for identifying, recording, and sharing information on evidence of fraud in the additional areas covered by the amended resolution.